206 BANKING THEORIES IN UNITED STATES

WAN
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origin of crises was made by a writer in the Democratic Review,
who, like Dew, gave particular attention to cotton.! Amasa
Walker, after describing the period of rising prices and business
activity, followed by that of falling prices and stagnation, declared
 that the activity of the boom period is primarily in speculation,
 not production. Furthermore, agriculture does not expand
as much as manufacturing, since the demand for the products of
the latter increases more rapidly. There is, in truth, “more
change of occupation than increase of industry.” 2 And, finally,
to note one other reference to the misdirection of capital as productive
 of crises, a writer in the Bankers’ Magazine for 1859
observed that the “extensive absorption of capital from the floating
 to the fixed state [e. g., railroad construction], may very
easily be, and, in point of fact, has been a fruitful source of commercial
 embarrassments.” ®
A curious idea, found in a number of writers, was that which
held, somewhat anomalously, that crises follow periods of general
overconsumption. Raguet, for example, pictured the typical
cycle arising from the mutual reaction upon each other of increase
in the quantity of bank currency, higher prices, and enlarged
volume of commercial paper, to its culmination in the crisis. At
this denouement, said Raguet, — inconsistently with his preceding
 account, — it will be seen ‘‘that during the whole of this
operation, consumption had been increasing, whilst production
was diminishing — that the community was poorer in the end
than when it began,” and that the apparent prosperity was not
unlike the affluence of the spendthrift as he runs through his
estate. Tucker agreed with Raguet, explaining that “by the
suspension or diversion of industry from its usual employments,
production is diminished, and, by creating notions of wealth
1 “Cotton and the Currency Question,” Democratic Review (March, 1838), i,
389, 390.
2 A. Walker, Nature and Uses of Money and Mixed Currency (1857), p. 7.
$ Crawley, ‘Credit, Currency, and the Precious Metals,” Bankers’ Magazine
(December, 18509), xiv, 421.
4 Raguet, “Principles of Banking,” Free Trade Advocate (July 4, 1829), ii, 7;
Currency and Banking (1839), p. 137.